Invention Assignment Laws in California: Who Owns What You Create

Federal law does not directly prohibit invention assignment agreements. Instead, federal patent law (35 U.S.C. § 101) establishes the 'shop rights doctrine,' which gives employers an automatic, royalty-free license to use inventions created by employees using company resources during work hours, even without a written agreement. However, federal law does not grant automatic ownership to the employer—only a non-exclusive license. The employee retains the patent rights unless they have explicitly assigned them in writing.

The Patent Act allows employers and employees to contract freely regarding invention ownership. Absent a written agreement, federal law presumes the employee owns the invention outright, and the employer has only a shop right to use it in the business without paying royalties. Enforcement occurs through patent litigation and contract disputes, not through an administrative agency like the EEOC or DOL. Federal law does not impose restrictions on overly broad invention assignment clauses the way California does.

California Labor Code § 2870 is dramatically more protective of employee inventors than federal law. Section 2870 creates an absolute prohibition on employer ownership or claims to inventions that meet any of three conditions: (1) inventions created entirely on the employee's own time, (2) inventions created without using any of the employer's equipment, supplies, facilities, or trade secrets, or (3) inventions that are developed entirely outside the scope of the employer's business and do not result from work performed for the employer.

Under California law, invention assignment agreements are void and unenforceable to the extent they attempt to claim ownership of inventions falling within these three categories, regardless of what the employee signed. This means even a broadly worded contract cannot override § 2870's protections. The law applies to all employers in California, regardless of size, and to all employees, including engineers, software developers, scientists, and other knowledge workers.

California recognizes that employers can own inventions created during work hours using company resources that directly relate to the employer's business or that result from work performed for the employer. However, the burden is on the employer to prove the invention falls outside § 2870's protected categories. Section 2872 requires employers to provide written notice of invention assignment rights in writing, either at the time of hiring or before assigning work related to the invention. Failure to provide this notice can render the assignment unenforceable.

California's approach differs fundamentally from the federal shop rights doctrine because it shifts power decisively to employees. An employee cannot be forced to assign ownership of side projects or personal innovations simply by virtue of being employed. Additionally, California courts interpret § 2870 expansively in favor of employees, requiring clear and convincing evidence that an invention is work-related before an employer can claim rights.

California Labor Code § 2870 contains important exceptions where employers can claim ownership. If an invention is created during work hours on the employer's equipment, using the employer's facilities, or using the employer's trade secrets, and the invention results from or is related to the employer's existing or prospective business, the employer may own it—provided the invention assignment agreement or written notice complies with § 2872.

Another key exception applies when an employee's duties involve developing inventions or technologies, such as a software engineer hired to write code or a researcher hired to develop new products. In this narrow context, inventions created during employment that relate to the company's business may belong to the employer, even if created on personal time, because the invention directly relates to work the employee was hired to perform.

However, even in these situations, § 2870 provides protection: if the invention was created entirely on personal time using no company resources and is unrelated to the employer's business, the employee retains ownership. Additionally, if an employer fails to provide written notice under § 2872, the invention assignment may be unenforceable.

At-will employment does not override these protections. An employer cannot condition continued employment on assigning inventions that § 2870 protects, because doing so would violate public policy. Union employees may have additional protections through collective bargaining agreements. Government employees and independent contractors have different rules; only statutory employees of California employers are covered. Employees who sign non-compete agreements or confidentiality agreements should note that these are separate from invention assignments and have their own enforceability limits under California law.

**Step 1: Document Everything.** Keep detailed records of when and where you created the invention. Save emails, messages, code repositories with timestamps, lab notebooks, sketches, or prototypes showing the date of creation and your personal resources used. Document whether you used company time, company equipment, or company facilities. Photograph or screenshot your work environment and note the time of day the work was performed. Save copies of any written invention assignment agreements, employment contracts, or notices provided by the employer. If the invention was developed on your personal computer or during personal time, preserve evidence showing this (timestamps on files, personal credit card receipts for equipment, witnesses who can confirm personal time creation).

**Step 2: Understand the Internal Complaint Process and Why It Matters.** Before filing a formal complaint, send a written letter to your employer's HR department or legal counsel clearly stating your position: that the invention was created on personal time, using personal resources, or is unrelated to the company's business, and therefore falls under § 2870 protection. Include specific dates, times, and facts. Request written acknowledgment that the company will not claim ownership. This letter creates a paper trail showing you attempted to resolve the matter internally and can be critical evidence if the dispute escalates. Keep a copy for your records. Internal resolution attempts also demonstrate good faith and may support a later demand for attorney's fees if you must litigate.

**Step 3: File a Formal Complaint if Necessary.** If the employer does not respond favorably or continues to claim rights, you have two primary options: (a) file a civil lawsuit in California Superior Court for declaratory relief and breach of contract, or (b) if the dispute involves patent infringement by the employer, file a patent dispute in federal court. There is no administrative filing deadline like the EEOC; instead, the California statute of limitations for breach of contract is 4 years from the date the employer breached (typically when they claimed ownership or attempted to use the invention without your permission). Consult an attorney before filing. The lawsuit should seek: (1) a declaration that you own the invention, (2) an injunction preventing the employer from using, patenting, or commercializing the invention, (3) damages for any losses, and (4) attorney's fees and costs under California law if you prevail.

**Step 4: Understand the Investigation and Litigation Process.** Unlike EEOC investigations, there is no administrative review of invention ownership disputes in California. If you file a civil lawsuit, the discovery process will follow California Code of Civil Procedure rules. The employer will likely request documents, depositions, and interrogatories to establish whether the invention is work-related. The burden shifts based on the initial showing: if you establish that the invention was created on personal time without company resources and is unrelated to the business, the employer must prove otherwise to claim ownership. Expect the litigation to take 12–24 months or longer if it proceeds to trial. Most cases settle before trial, often through mediation.

**Step 5: Consult an Attorney Early.** Contact an employment law attorney or intellectual property attorney licensed in California immediately if the employer claims ownership of an invention you believe is protected under § 2870. Do not sign any assignment documents or settlement agreements without legal review. An IP attorney can assess the strength of your position, evaluate whether the invention is patentable, and advise on licensing or sale options. Many employment lawyers work on contingency in these cases, especially if damages are high. If you cannot afford representation, contact the California Lawyers' Referral Service (lawyerreferral.org) for a low-cost initial consultation. Acting quickly preserves evidence and prevents the employer from obtaining a patent or licensing the invention to third parties.